Logjam broken on live dealers for Cherokee, but not a done deal yet

A political impasse over live dealers and table games at Harrah’s Cherokee Casino has been resolved, but the tribe still has some heavy lifting to go before it can close the deal.

The Eastern Band of Cherokee Indians needs the blessing of both the governor and state lawmakers to add live dealers and table games. The tribe offered to give up a cut of gross gaming revenue to win the needed support.

While Gov. Beverly Perdue and Republican leaders in the General Assembly had agreed in theory to live dealers last fall, they had locked horns on a seemingly obscure sticking point. Perdue wanted the state’s cut of casino revenue to go directly to schools, bypassing the General Assembly. That way, lawmakers couldn’t be tempted to tap the money for other uses.

Republican leaders, however, said casino revenue couldn’t legally be put in a lockbox and earmarked for future years. One set of lawmakers today can’t impose mandates on how future lawmakers can spend money. It’s up to members of each General Assembly to craft the state budget each year as they see fit, regardless of instructions left behind by previous lawmakers.

For its part, the tribe preferred that the state’s cut of casino revenue be directed to education as well.

Sen. Jim Davis, R-Franklin, said it was admirable of the tribe to choose such a worthy cause for casino revenue, but it’s simply not possible to make those kind of promises.

“I think it is totally appropriate for the Eastern Band to express their wishes for where the money goes, but the General Assembly cannot determine for future General Assemblies where money goes,” said Davis, the state representative for the seven western counties, including Cherokee.

Based on letters written between the Republican leadership in the General Assembly and Perdue in recent months, each blamed the other for holding up Cherokee’s live dealers. The dispute underscored a longstanding source of acrimony between Perdue and her Republican counterparts over education funding.

It appears Perdue eventually gave in, according to a recent version of the live gaming deal.

New language in the proposed deal acknowledges the wishes of the governor and the tribe to see the state’s cut of casino revenue go to schools. But it likewise acknowledges that “the General Assembly is not bound” to spend the money for education. It will simply go into the state’s general fund instead.

Perdue seems to have extracted a promise that at least for the next couple of years, however, the casino money will go to education. But there are no guarantees after that.

“Gov. Perdue believes that the state’s revenue from the new compact should be used for education, and we are confident that will be the case for at least the next two years,” according to a statement from Chris Mackey, Perdue’s press secretary.

Other hurdles not yet cleared

While one logjam has been broken, the tribe still faces a challenge in mustering the necessary support to pass the General Assembly.

The tribe is actively lobbying to get the number of votes needed to bring bona fide live dealers and table games to the casino. On the Senate side, things are looking good, according to Davis.

“I think we have the votes in the Senate. I have been working really hard to get those,” Davis said.

It appears to be much closer in the House of Representatives, however — perhaps too close to call right now.

“Some people were concerned it might be another Las Vegas,” Davis said. “There are some people who have real ethical principles against gambling.”

One of those is Rep. Ray Rapp, D-Mars Hill, who has been torn over the issue.

Rapp is against gambling for the social ills it causes. For some, gambling is simply a form of entertainment and recreation. But for others, it is an addiction.

Rapp voted against the state lottery several years ago and has been public enemy number one against the video gambling and video sweepstakes industry, leading the charge to outlaw the digital gambling terminals.

“Many of the people who are playing these games have little or no disposable income. They are taking away from their family’s basic needs, food and housing money, to gamble,” Rapp said.

Rapp had resigned himself to the casino’s presence in Cherokee and was willing to support the addition of live dealers there — but only there.

“If they were going to stay in those confines of the existing campus, I would be fine. They already have gambling there, so I could support that,” Rapp said.

But the deal brokered with the state would have allowed live dealers at any new casinos built by the tribe in the future on other tribally-held lands in Jackson, Swain, Graham or Cherokee counties.

“This wasn’t permitting it in place, but was allowing an expansion,” Rapp said. “That brought me up short.”

Specifically, Rapp was concerned about a tribally-owned tract of land near Andrews that is being eyed by the tribe for a small-scale casino — something less than a full-fledged casino but something slightly more than a bingo hall.

There has been movement to amend the language in the compact with the state to limit live dealers to gambling facilities on land held by the tribe prior to the mid-1980s — not tracts it has added to trust lands in more recent years. But that still may be too much of a blank slate for some legislators. If the vote was held today, it’s not clear how the final count would come down.

“It will be a very, very close vote in the House with both Republicans and Democrats voting against it,” Rapp said.

Davis said lawmakers might be a little more flexible after this week’s primary election is behind them.

Davis said while he personally doesn’t gamble, his Libertarian streak doesn’t think the government should over-regulate and limit free enterprise. He also is eager for the economic boost live dealers may bring.

“I think we need to do everything we can to enhance the economic climate in the western part of the state,” Davis said.

Harrah’s Cherokee Casino currently is limited to video-based gambling. The tribe has touted the economic impact of adding bonafide table games and real cards.

It would attract more guests — those of a different caliber and demographic than its core base of players today — which in turn will mean 400 more jobs and an economic boost for all of WNC.

It will also mean more money for the tribe, which uses casino proceeds to fund social programs, education, health care and other services for tribal members, as well as a twice-annual personal check for each of the 14,000 members of the tribe.

Years in the making

It took years of lobbying and negotiations for the tribe to get to this point. In an historic agreement signed with Perdue last November, the tribe agreed to give up a cut of its revenue from the new table games — on a sliding scale starting at 4 percent and maxing out at 8 percent over the next 30 years. In exchange, the state would allow real dealers and a guarantee that no other casinos would be allowed to encroach on its core territory, namely anywhere west of Interstate 26.

Perdue’s office is putting a positive spin on the prospects of passing the measure before she leaves office in November.

“We are comfortable that all of the issues around the agreement will be settled in time for the General Assembly to pass the appropriate legislation this year,” Mackey said in a statement.